Fake Account Case

 Oct 22, 2018: JIT reveals in its second report that what started as fictitious bank accounts evolved into an extremely complicated scam of money laundering crossing Rs 100 billion.

• The JIT report is made up of 27 volumes, 27 investigation reports, and an executive summary of 135 pages with 95 big annexures. The 25the volume of the JIT report carries explosive incriminating evidence against the key accused, Head of the JIT team Ehsan Sadiq requested the Supreme Court not to disclose this volume. This volume consists of three parts - System, Foreign Properties in the US, UK, France, and Dubai, and Interior Sindh Agricultural Empire.
• JIT clubbed relevant addresses and details of some 25 properties directly or indirectly acquired by Asif Zardari,  and Faryal Talpur in Paris, New York, London, and Dubai.

• The key accused in this report were minting more than Rs 40 million monthly, and laundering it through hawala and hundi through some 120 frontmen, Ayyan Ali, Younas Kudwai, and Abdul Jabbr in particular.
• The FIA is investigating 32 people for money laundering from fictitious accounts, including former president Asif Ali Zardari and his sister Faryal Talpur. Zardari's close aide Hussain Lawai was arrested in July in connection with the probe.
• The former president's other close aide and Omni Group chairman, Anwar Majeed, and his con Abdul Ghani Majeed, were also arrested by the FIA in August. Lawai, Majeed, and his son remain under custody.
• JIT also revealed that several 'benami' accounts of unsuspecting individuals and even those who have been dead for years at some private banks were opened in 2013, 2014, and 2015 and billions of rupees transactions were made through these accounts. This was the black money gathered from various kickbacks, commissions, and bribes.
• JIT identified 11,500 bank accounts and 924 account holders, the experts generated 59 Suspected Transaction Reports (STR) and 24,500 Cash Transaction Reports. That means the transactions were flagged as suspicious.
• JIT questioned 767 individuals including Zardari and Talpur, while Bilawal submitted written responses.
• The names of 172 individuals have been placed on the no-fly list by the interior ministry on the JIT's request.
• M/S Lucky Enterprises accounts made 13,809 transactions between January 2010 and January 2017.
• Omni Group low-level employees made transactions operated by Omni Group Executives.
• The report explains the process of the fake accounts, breaking down their actions in light of the classical stages of money laundering. It starts with the placement, where funds from unlawful sources are placed in unrelated accounts. The second stage is called layering, where the amounts are split, withdrawn, re-deposited, and merged back into the financial system. The final stage is integration, where the laundered money is shown as profits fraudulently.
• The report states that Summit Bank was acquired for the explicit purpose of money laundering, a well-known and common technique used by launderers around the globe known as ' Bank Capture'. The launderers buy a controlling interest in a bank to circumvent prudential regulation without risk of scrutiny.
• In another case, the National Bank, Sindh Bank, and Summit Bank gave loans to Omni Group to the tune of Rs 53 billion, which were then rescheduled over thirty times. Moreover, the value of the collaterals was not only inflated but the same assets were used repeatedly for that purpose with fraudulent intent.
• The loan given by Sindh Bank was Rs 8 billion more than its total equity of around Rs 16 billion. Murad Ali Shah, was the finance minister at the time when the loans were approved despite the opposition of the then top bureaucrat of the provincial finance department.
• Zardari used the fake accounts to pay the duties and taxes on vehicles including vehicles received from foreign governments during his time as President of Pakistan. The gift such as a car require to be deposited in the central pool of the Cabinet Division. However, Zardari kept the vehicle on the payment of 15% of their value. 
• The fake accounts were used to pay the personal expenses of key members of Sindh's ruling party including Bilawal Bhutto Zardari.
• JIT also told the Supreme Court two-judge bench headed by Chief Justice Mian Saqib that a close nexus had been found between a troika of Zardari Group, Bahria Town (Zain Malik, son-in-law of Malik Riaz the chief executive of Bahria Town), and Omni Group. Other groups included Parthenon Pvt Ltd, Arif Habib, and a group of contractors/builders including Mustafa Memon, Sardar Ashraf D Baloch, and Sher Mohamed Mugheri.
• JIT also pointed to the role of Zardari, when he was president of Pakistan, that he not only orchestrated this fraudulent misappropriation, but also shareholders in M/S Park Lane where Bilawal Zardari has 50% direct shares.
• The JIT named 24 key accused (operators, beneficial owners, abettors, and bankers) including Anwar Majeed (head of Omni Group), Abdul Ghani Majid, Aslam Masood (Chief financial officer of Omni Group), Noreen Sultan (then relationship manager at Summit Bank), Hussain Lawai (then-president of Summit Bank), Asif Zardari and Bilawal.
• The JIT comprises Additional Director General of the FIA Ahsan Sadiq, Brig Shahid Perven of the ISI, Muhammad Afzal of the SECP, Nauman Aslam of the NAB and Imran Latif of the FBR.
• The summary chart displayed in the courtroom showed that the trio used to transfer billions of rupees of kickbacks and commissions through their front companies and contractors/builders. The receipt of Rs 10.02 billion in kickbacks through fake accounts by Asif Zardari.

• The JIT explored 11,500 bank accounts of 924 individuals and companies associated with the fake accounts.
• The summary revealed that kickbacks of Rs 1.36 billion had been laundered through the bank accounts of 19 contractors. Rs 10.2 billion had been laundered through accounts of Bahria Town. Zain Malik, son-in-law of Malik Riaz, and Mushtaq Ahmad, a former secretary of former President Zardari, had been maintaining the accounts of Bahria Town.
• JIT also informed that Mushtaq Ahmad was also involved in model Ayan Ali's money laundering case. FIA Director General Bashir Memon was also present in the court.
• The JIT also told the court that a 64-storey tower "Bahria Icon" being constructed in Karachi's Clifton area was owned by Asif Zardari and Zain Malik through companies of their frontmen. The tower was being constructed on controversial land, while a large portion of Bin Qasim Park had been encroached upon by it. It was a controversial project of over Rs 50 billion.
• The court was told that Rs 1.22 billion had been paid to Faryal Talpur by JV- OPAL- 225 - a venture of Zardari and Bahria groups. The building of the company was established on land owned by Hakim Ali Zardari father of Asif Zardari.
• To a court's query, the JIT told Bilawal House in Bahria Town, Lahore was owned by the Zardari Group. Initially, the property was gifted to Asif Zardari by Baria Town, but it was not accepted and half of its costs of Rs 170 million had been paid so far by the Zardari Group to the housing society.
• The expenditure of Bilawal House worth Rs 4.14 million was paid out of the fake accounts to " the Deli Restaurant" proprietor Tina Mehdi for catering and event services at Bilawal House.
• Purchase of air tickets worth Rs 12.82 million was made through fake accounts routed through M/S Pak Paradise, and M/S Fazl-e-Rabbi Travels for Bilawal Zardari, Aseefa Zardari, Mirza Arshad Baig, Sharmila Farooqi, and Asif Zardari.
• JIT report further revealed that the Omni Group had outstanding loans of Rs 53.4 billion obtained from the Sindh Bank in violation of rules by establishing its front companies. It said that the expenditures of the Zardari family had also been met through accounts of the Omni Group. The expenses included the purchase of sports equipment, dog feed, goats for charity (sadaqah), dry cleaning, heaters, furniture, birthday functions, lunch of Bilawal and Zardari, etc. The report said loans of the Omni Group were restructured at least 83 times whereas a default loan from the National Bank of Pakistan had yet to be recovered for the last 10 years.
• JIT told the court that the Omni Group carried out illegal constructions on plots reserved for amenities, temples, libraries, and gymnasiums by converting their titles. At least Rs 1.4 billion had been transferred out of the country through 'hundi and hawala'.
• Anwar Majeed and Omni Group were represented by counsel Shahid Hamid and Muneer Bhatti, Zardari family was represented by Farooq Naek.
• KAM Crown International Company, owned by the Majeed family was collecting all the laundered money.
• The court banned the sale/purchase of properties owned by the three groups and their front companies including JV-Opal-225, Park Lane, Parthenon, and Bahria Icon.